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|Total Cost of Ownership (TCO)
financial estimate of the
all encompassing costs of a single asset,
or group of assets or and entire building, throughout its/their lifecycle, from
acquisition to disposal or over another specified time period.
The aim of TCO analysis is
The purpose of TCO is to help owners determine all the direct costs and indirect costs of their investment. The total discounted dollar costs of the following actions relative to a single asset or a group of assets:
A. By life stage
C. By expense classification
Since it is very difficult to obtain or forecast data for total lifecycles of buildings, TCO is more realistically calculated over one of the following time periods:
Cost distributions at different life stages are summarized in various life models, including:
TCO is a combination of the following three individual but interconnected loads:
Quantification and Analysis
The TCO can be expressed in the following ways.
Fig. The impact of different levels of maintenance on the total cost of ownership (TCO).
Fig. In order to calculate the total cost of ownership (TCO) decisions should consider the whole life of assets.
Fig. TCO distributed across the different systems of a facilty or across the asset portfolio.
Fig. TCO distributed by lifecycle stage: design, construction, operations, disposal.
Fig. Table of the system cost distribution reflected in both current value (CV) and escalated to future value (FV).
Fig. Model of facility lifecycle costs distributed by time, typically over a planning horizon or study period.
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